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Barclays Faces Tough Search For Next Diamond

Barclays Plc has few obvious candidates who would be able to restore the British bank's tarnished image after the departure of Chief Executive Bob Diamond.


The strongest internal candidate to replace Diamond could be Antony Jenkins, who runs the bank's retail and commercial banking operations. The former Citigroup executive, 50, was seen as a future CEO, but has little investment banking experience and would not mark a clean break.

Another candidate is Naguib Kheraj, the former Barclays finance director who briefly headed JPMorgan Cazenove before the investment bank was fully swallowed by JPMorgan.

Kheraj has been tipped for CEO roles in the past, such as at Lloyds Banking Group Plc, and may be up for the challenge. But he is still an adviser at Barclays and only left as finance director in 2007, so was at the bank when some traders were trying to manipulate Libor rates, wh i ch could count against him.

Two long shots could be Jes Staley, head of JPMorgan's investment bank - but only if he sees little chance of getting the top job there - or Hugo Banziger, former head of risk at Deutsche Bank AG who was ousted earlier this year.

Bookmaker Ladbrokes said Jenkins is favourite for the job at odds of 2/1. Winters is 5/2 and Kheraj is 4/1. Current finance director Lucas is 6/1.

Some of the bank's shareholders would prefer an external candidate as the best guarantee of a culture change after 60-year old American Diamond sowed a competitive and aggressive atmosphere, former colleagues have said.


"While making an internal candidate CEO has attractions, in that they would hit the ground running, there might be problems with the perception of such an appointment," one top 25 Barclays shareholder, who asked not to be identified, told Reuters.

"Promoting an existing manager might not look like it is doing enough to tackle problems with aspects of the bank's culture which the Libor scandal has exposed."

But without swift progress to fill the vacant roles, any praise for the board's dramatic shake-up of the bank's executive ranks could quickly evaporate.

Investors will be looking for evidence of a succession plan being implemented, said Simon Wong, a partner at corporate governance watchdog Governance for Owners.

"There were concerns expressed that perhaps the shareholders did not want the CEO to step down because there was no obvious successor, and if that is the case, then that is probably the biggest failing of the board," Wong said.

"It is so important for the CEO to exhibit strong values and to be able to communicate those values ... It's really about the tone at the top. To be mindful of the public mission of a bank."

Asked how long Barclays would take to fill Diamond's role, and the role he is slated to leave, Agius was less than specific.

"How long is a piece of string?", he told reporters on a conference call, arguing he was the obvious person to lead the search despite reiterating his intention to leave.

Graham Dietz, a lecturer at Durham Business School who recently hosted workshops on how to rebuild trust for UBS executives in the wake of its rogue trading scandal, said the lack of an obvious succession plan was a major shortfall by the Barclays board.

"The three things you think about when you consider whether a person or organisation is trustworthy are motives, ability and integrity. They have failed on ... the triple whammy, demonstrating complete incompetence on how to handle this."

(Editing by David Holmes)

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